As we approach the final quarter of 2007, however, the future of mobile TV is,
if anything, more uncertain. As individual carriers in different markets adopt their preferred technologies, the list of 'standard' broadcast solutions seems to be growing at the same rate as new services are launched.
In Europe, during the summer, the EC finally backed DVB-H for mobile TV rather than remaining technology neutral. In Japan and South Korea, service uptake on existing ISDB-T, and T-DMB and S-DMB, is continuing to build, albeit slowly. In the US, Verizon and AT&T have both selected Qualcomm's MediaFLO solution, which launched in March and Verizon has already gone live.
Meanwhile, BT Movio's, and therefore Virgin Mobile's, DAB solution in the UK folded due to poor uptake less than one year after launch, along with Crown Castle's DVB-H solution in the US.
On Europe, David McQueen, principal analyst Informa Telecoms&Media says: "It is possible to see the logic of support for a single mobile TV standard for Europe. GSM as a de facto standard allowed economies of scale in the industry, and made roaming easier. In theory, therefore, choosing DVB-H, is like getting the whole of Europe to go down the GSM route. Also, you are backing the frontrunner."
But backing a frontrunner that won't arrive in some markets until 2012 seems a trifle premature; at least, so says ROK TV CEO, Bruce Renny: "You have got to look at when this service is going to be available in the UK. I can tell you, 2012 at the earliest when the last of the analogues is switched off. Now 2012 in the mobile environment is a lifetime away. I mean, a month is a long time in the mobile entertainment space, quite apart from five or six years."
A recent report from Dutch analyst house Telecompaper revealed that, although three operators (KPN, Vodafone and Orange) in the Netherlands offer mobile TV, only 1.4 per cent of subscribers has watched TV using a cellphone. In fact, from a list of 22 unique data services, mobile TV was the least popular.
M:Metrics, meanwhile, found that the number of subscribers that watched any commercial programmed mobile TV and/or video, once or more, in a month in France, Germany, Spain, Italy and the UK combined, in the three months ending July 2007, was 2,386,795. It looks like a fair size number, but in reality it's only 1.12 per cent of subscribers.
In a recent strategic report Mobile TV: Broadcast Network Rollouts, Business Models and Handsets, Informa Telecoms&Media predicts the market for broadcast mobile TV devices grew from 0.81 million in 2005 to just over four million in 2006. These devices are expected to find their way into 12.3 per cent of new handset sales by 2012, representing an expected market of 178 million phones.
The ITM report states that an inflection point is expected to occur in 2009 as network rollout and device availability allow for the market to reach some level of critical mass. Informa goes on to predict that there will be 335.6 million broadcast mobile TV users worldwide by 2012, up from a mere 12.1 million expected in 2007, with an inflection point expected in 2009-2010.
According to Informa, a number of possible scenarios emerge that could enhance or dilute mobile operator strengths in the mobile TV value chain.
First, the 'discrete' business model, where the MNO chooses to provide TV services only over its own cellular networks, or via network optimised solutions, with no other broadcast network interaction. Second, the 'principal' business model, where the MNO is lead player in the broadcast TV industry, which includes some level of interaction with broadcast network services. Third, a 'converged' business model, where the MNO and others in the value chain work in cooperation to take advantage of the complementary nature of cellular and broadcast networks. And fourth, the 'bypassed' business model, where the MNO is bypassed altogether by a broadcast network operator in providing mobile broadcast TV, but may still provide an uplink.
There are advantages and disadvantages that go along with each of the above scenarios. The discrete model will appeal most to those operators that have already invested in a 3G network, since it requires minimal further investment and it ensures that the MNO retains full control of the service and therefore will derive the optimal revenues.
Not surprisingly, most of the noise coming from tech vendors at the moment surrounds rolling out new kit as part of a broadcast solution. Detractors of the discrete model point out that a unicast offering is limiting and would have a detrimental effect on other 3G services in the cell. Therefore, they say, operators need to embrace either a principal or converged model.
"We already have mobile TV on networks with 3G. So if you have invested in a 3G network it is very cheap to deploy a service," points out Alban Couturier, mobile TV product manager, Thomson. "But for users the data cost is high. Which puts people off. Using DVB-H you have lots of costs to deploy, but new customer additions are cheap. Once you reach critical mass, the costs become very low. You can't have that with 3G," he says.
One firm only too happy to be involved in Vodafone's discrete model is British Sky Broadcasting. Steven Nuttall, director commercial group, British Sky Broadcasting, speaking on a recent Telecoms.com webinar, outlined how pleased he is with the pace of mobile TV in the UK: "A year or so into running a service, we've got several hundred thousand customers, paying real money to use it. We've got millions of people using more general mobile services, many of which are video, so I don't know at what point you would say that video is a mass market. I think it is reasonable to say that at a minimum we're pretty close to that point already."
ROK TV's Renny says his firm offers a discrete solution for carriers that have yet to rollout 3G networks. "There are 100 million people worldwide who have signed up to 3G. It sounds impressive, but that's about three per cent of the global mobile market. A 100 million uptake across a three billion market place is, in anyone's language, niche."
ROK offers the ability to stream video over what Renny says are vastly underused GPRS networks. "I think linear TV over mobile phones will prove very popular indeed. The question is how many people will be willing to pay a subscription service to receive linear TV on their mobile phone? Particularly, when you get all that at home for free. The notion of 'build it and they will come' is flawed," he says.
Renny points out that TV on the mobile is not the same as broadcast TV. "It isn't viewed in the same way, it is delivered through a different vehicle and it is a different animal completely. Broadcast TV available on mobile phones will prove popular, but only as a value add in a general mobile bundle. As a stand alone subscription service it will have very limited uptake indeed," he says.
Another firm that advocates taking full advantage of existing resources is IPWireless. The firm's TDtv offering uses the 5Mhz of UMTS TDD spectrum that the majority of 3G operators across Europe have at their disposal. Thanks to the 3GPP specified MBMS (Multimedia Broadcast and Multicast Services), operators can take an existing 3G network and render it multicast, rather than unicast.
The firm had a multi-operator trial in the UK city of Bristol last year. CMO Jon Hambidge told MCI the technology matches DVB-H and MediaFLO in terms of available channels and he is confident that an operator in Europe will go live with the service sometime next year.
"A lot of people are questioning the need for broadcast services," says Hambidge. "One of the reasons is that they are very expensive. I've seen some economic analysis on DVB-H showing that it has a very hard time breaking even down at a ??????5 type level. I think the economic analysis we've seen shows that TDtv, for an MNO, is going to breakeven somewhere around a five times lower price point. So it really keeps mobile TV as a 3G service."
While ROK's Renny may think the 'build it and they'll come' scenario is flawed, Qualcomm would disagree. The San Diego firm's subsidiary MediaFLO USA rolled out its mobile TV solution across America going live in March 2007. Subsequent to that, Verizon launched a service on the network, and will soon be followed by AT&T.
"There are a lot of challenges with that pure wholesale approach," says Omar Javaid, VP of global strategy and business development at Qualcomm. "The interesting thing about mobile TV is that it is a converged service and there are so many different industries involved. When the telecommunications industry is looking at it, they're looking at it primarily from an infrastructural and technology approach, and what tends to get missed in that equation is the whole content rights issue."
Javaid highlights a common assumption that the free-to-air broadcasters will simply provide their content for mobile TV platforms. While the content providers will maintain that the rights for free-to-air broadcast do not extend to this kind of platform. So the content rights need renegotiating, and they're not free. "When you work out the match it becomes much more expensive. Both from a wholesale perspective and then subsequently a retail perspective. I don't think it is impossible to do, but somebody ends up having a pretty marginal business," he says.
Each of the networks under consideration for delivering mobile TV has their own advantages and drawbacks. The most recurrent themes are the ability to provide a one-to-many broadcast topology, network and device costs, reception quality, regulation, spectrum allocation and efficiency, handset manufacturer and network vendor support, and technology fragmentation in different geographic regions.
Broadcast networks use spectrum allocation and one-to-many broadcast efficiently, unlike many of the mobile TV point-to-point offerings available over cellular networks, even 3G, which put the network under enormous strain. The broadcast network technologies, such as DVB-H, MediaFLO and DMB, are far more efficient in terms of time and bandwidth usage, which means they are more cost effective, but they do not enable fully interactive content, something that the cellular networks can provide. However, fragmentation of the market into different technologies using different frequencies is a major risk for the nascent mobile broadcast TV market.
For now, the most sensible plan looks like the one advocated by Anders Kalvemark of Ericsson: "I think we will see various types here. Our main strategy is that the operators will have their own 3G networks and then they will enable broadcast capabilities, which could be NGN, so the evolution of 3G. Dedicated broadcast networks will probably arrive, they already have in a few countries, but it is obviously a large investment. I wouldn't be surprised if we saw a consortium of operators coming together to set up these types of network."
Alban Couturier of Thomson: "3G operators should leverage existing services by offering a hybrid of services. They should offer the most popular channels over broadcast, but they should offer the long tail over 3G because it is ideally suited for video on demand."
Of the four models described by Informa Telecoms&Media, it is possible that, for the longer term success of the mobile TV industry, cooperation and understanding between the players in the value chain, providing a converged solution will ensure the best possible experience for the customer. This allows broadcast media to be combined with, and used to complement, cellular communications to enrich the user experience and encourage interactivity. There will undoubtedly be problems with implementing this scenario with so many large brands fighting turf wars. But, if the industry can overcome its natural competitiveness in this instance, it will allow the delivery of new revenue sources for all in the value chain.
However, mobile operators currently offer mobile video and TV services over their own 2.5G and 3G networks and the advent of broadcast networks in the mobile space will undoubtedly affect their stature in the ecosystem. Although much is made regarding operators providing a return channel for interactive services, a potential future scenario could be one where even the provision of this channel is taken away as return channels become more prevalent through the broadcast network, weakening the position of the mobile operator in the mobile TV value chain.
In contrast, the migration by the operators to next-generation 3.5G and 4G networks could also negate the need by the operator to involve broadcast networks in the provision of mobile TV as these will allow for greater speed and bandwidth to provide a more cost-effective mobile TV offering.
Back in 2006, Virgin Mobile's head of mobile TV Paul Coombes told MCI his firm was launching using a DAB solution because it was "available". Right now, that choice seems like folly. Not surprisingly, neither BT nor Virgin wanted to comment for this piece. In fairness, there really are no sure things in this industry. But right now, trying to back a winning solution looks more like an expensive gamble rather than a sound investment.
DoCoMo and Fujitsu Laboratories 
